What should a 20-room UK hotel charge on a Tuesday in November?

A 20-odd-room independent hotel in the UK should charge, on a Tuesday in November, roughly what the three or four hotels a guest would genuinely compare it with are charging that night, adjusted by how its own bookings are tracking against last year. For our 24-room example on the Welsh coast, that lands at about £92, a little under its £110 autumn midweek rate, with a two-night offer doing the work a deeper discount would otherwise do.

The number matters less than the method. The rest of this post is the method we use at our hotels, and the arithmetic behind it.

Why does a Tuesday in November need its own price?

Because nothing about it looks like the rest of your year. Leisure guests have gone home, half-term is over, the Christmas parties have not started. What is left is a thin layer of business travel, contractors, people visiting family and the odd couple who like an empty beach.

That thin demand is also price sensitive. A guest booking a November Tuesday has usually got three tabs open. If your rate is still your September rate, you will not hear from them. If it is £30 under everyone else, you will fill rooms you could have sold for more and teach the market that you are the cheap option.

The rate you set now, five or six weeks out, is the one guests see until you next change it. So it is worth twenty minutes.

How do you work out the rate?

Five steps, in this order.

1. Pick the hotels a guest would compare you with. Not every hotel in town. Three to five properties of a similar size, standard and location. This is your competitive set, and it should rarely change.
2. Look at what they charge for that exact night. Not last week’s average: the specific Tuesday, for one night, two adults. Note the middle of the range, not the lowest. The middle is what a guest sees as normal.
3. Check your own bookings against the same point last year. How many rooms do you have on the books for that night now, and how many did you have for the equivalent Tuesday at the same distance out? This is pace, and it tells you whether to sit above or below the middle.
4. Know your floor. Add up what it costs to service one occupied room (cleaning, laundry, breakfast, energy, amenities) and add the OTA commission on a booking that comes through a travel agent. Never price below that.
5. Set the rate, then decide when you will look again. Write the review dates down: say 21, 14 and 7 days out. A rate is a decision with an expiry date, not a setting.

If you want the longer version of this, with seasons, events and the weekly routine, it is in our guide on how to price hotel rooms.

A worked example: Tuesday 17 November

Our example hotel has 24 rooms on the Welsh coast. It sells around £110 a night midweek in autumn and £165 on a summer Saturday, runs at 68% occupancy across the year and takes about 40% of its bookings through online travel agents.

It is Saturday 10 October. The night in question is Tuesday 17 November, 38 days away.

The competitors. Four hotels a guest would compare it with are charging, for that night, £84, £92, £98 and £105. The middle of that range is £95.

Its own bookings. Six rooms are on the books for that Tuesday. On the equivalent Tuesday last year, at 38 days out, it had seven. Last year that night finished with 11 rooms sold, which is 46% occupancy. So the hotel is slightly behind, but not by much.

The floor. Servicing one occupied room costs about £32 once you count housekeeping time, laundry, breakfast and heating. A booking through a travel agent at 15% commission on £92 costs £13.80. Call the floor around £46 through that channel and around £35 direct.

The decision. The hotel is a touch behind last year, so it sits a little under the middle: £92 for one night. It also opens a two-night rate at £170 (£85 a night) for Monday and Tuesday, or Tuesday and Wednesday, because the Monday and Wednesday are just as quiet and one longer stay costs one changeover rather than two.

What that is worth. If the night finishes at 11 rooms, as last year, at an average of £92, that is £1,012 in room revenue. If the two-night rate brings in three extra stays, the Tuesday alone gains £255 and the neighbouring nights gain the same again. Compare that with dropping to £79 for everyone, which would need two more rooms sold just to stand still.

The review dates. 27 October (21 days out), 3 November (14 days out) and 10 November (7 days out). If by 3 November the hotel is ahead of last year, it moves to £98. If it is behind by three rooms or more, it does not cut the headline rate; it adds a breakfast-included package at the same price first.

What should you watch out for?

• Chasing the cheapest hotel. The hotel at £84 may have had a bad review run or rooms over a bar. Pricing against it puts you in its category.
• Comparing the wrong rate. Make sure you are comparing like with like: room-only against room-only, a refundable rate against a refundable rate.
• Ignoring the town calendar. A November Tuesday with a conference or a rugby international in Cardiff is not a quiet Tuesday. Check for events before you set anything.
• Forgetting the channel cost. £92 through a travel agent is not £92 in your account. Use the OTA commission calculator to see what a booking actually nets.
• Cutting late in a panic. A last-minute cut mostly rewards the guests who were going to book anyway. If you are going to move down, move early and move once.
• Treating last year as the truth. It is a reference. If you added rooms, changed your breakfast or lost a corporate account, adjust for it.

What if you do not have time to do this every week?

Most owner-managers do not. That is the honest reason so many small hotels leave one rate on all winter. If you would rather see what the hotels around you are charging for each night, and how your own bookings compare with last year, without building the spreadsheet yourself, you can start a 14-day trial of RatePulse and look at your own November.

Either way, open your calendar now, find the quietest Tuesday in November, and do the five steps for that one night before you close the laptop.